Gold stalls as US jobs data keeps door open to September Fed rate hike

Gold steadied not far above a 5-1/2-year low on Monday, with a firm dollar after solid US job gains in July suggesting the Federal Reserve could raise interest rates as early as next month.

US nonfarm payrolls increased 215,000 in July, less than the 223,000 rise that economists had expected, although still seen in line with a tightening labour market. Payrolls data for May and June was revised to show 14,000 more jobs created than previously reported.

Spot gold was unchanged at $1,092.86 an ounce by 0220 GMT, recovering from an early low of $1,089.40.

The metal fell for a seventh week in a row last week, its longest such retreat since 1999, having struggled to pull away from a 5-1/2-year trough of $1,077 reached during a late rout in July.

US gold for December delivery eased 0.2 per cent to $1,092.20 an ounce.

China’s foreign exchange reserves, the world’s largest, fell by $42.5 billion in July to $3.65 trillion, the sharpest monthly drop since March amid signs of capital outflows. The value of China’s gold reserves dropped to $59.24 billion from $62.4 billion.

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Posted in: Indian Market Tips